IN THE SUPREME COURT OF VICTORIA AT MELBOURNE COMMERCIAL COURT SCI 2016 03782 BETWEEN: THANASIS RAPTIS

Plaintiff

-andCITY OF MELBOURNE and 333 CHOICE PROPERTIES PrY LTD

Defendants

ORDER JUDGE:

The Honourable Associate Justice Mukhtar

DATE MADE:

30 May 2017

ORIGINATING PROCESS:

Originating Motion

HOW OBTAINED:

The first defendant's summons filed 9 November 2016 and the second defendant's summons filed 10 November 2016.

ATTENDANCE:

Not required.

OTHER MATTERS:

The Court heard submissions on the defendants' applications on 6 March 2017 and reserved its decision. The Court's reasons for decision were published on 10 May 2017 in [2017] VSC 247. On 11 May 2017 the Court made orders allowing for the sequential filing of written submissions on the question of costs. The Court's Costs Determination is attached.

THE COURT ORDERS -

1.

This proceeding as against the second defendant is dismissed.

2.

The plaintiff shall pay the second defendant's costs of this application and the second defendant's costs of this whole proceeding on the indemnity basis under rule 63.30.1.

3.

The whole of the indorsement on the originating motion except for the statement of 'relief sought' is struck out.

4.

The plaintiff shall pay the first defendant's costs of this application on the standard basis under rule 63.30.

5.

lf the plaintiff intends to proceed against the City of Melbourne on an amended indorsement, he must first seek an order that the motion be converted to a writ and, at the same time, obtain the Court's leave to file and serve a proposed statement of claim supported by an affidavit verifying material facts.

6.

For the purposes of order 5, if such an application is not filed by 4:00 p.m. on 30 June 2017, then the remainder of this proceeding as against the first defendant shall, by self-execution, be dismissed with costs.

DATE AUTHENTICATED: 30 May 2017

ASSO CIATE JUDGE

THE HON ASSOCIATE JUSTICE MUKHTAR

IN THE SUPREME COURT OF VICTORIA AT MELBOURNE COMMERCIAL COURT

Not Restricted

SCI 2016 03782 Plaintiff

THANASIS RAPTIS - and-

First Defendant

CITY OF MELBOURNE

Second Defendant

333 CHOICE PROPERTIES PTY LTD

COSTS DETERMINATION MUKHTARAsJ:

1

On 10 May 2017, the Court gave its decision and published its reasons to allow the applications made by the first and second defendants: see [2017] VSC 247. That is, the Court dismissed this proceeding as against the second defendant ('the lessor') on the ground that the plaintiff's case against the lessor was a retail tenancy dispute within the meaning of the Retail Leases Act and, as such, came within the exclusive jurisdiction of VCAT. It was therefore not justiciable in this Court. I also struck out the indorsement of the claim as against the first defendant ('the City') on the ground that it did not disclose a cause of action and was frivolous.

2

The closing paragraph of my judgment said: 'On the question of costs, I can see no reason why they should not follow the event. That is, the plaintiff pay the lessor's costs of the proceeding and the application, and pay the City's costs of its application.'

After being informed that the lessor sought a special costs order, I

made an order on 11 May 2017 permitting sequential written submissions on costs. 3

The City stated it would not be making any further submission on costs. That means it will be content with the usual order for costs to be taxed on the standard basis under the rules of court.

The lessor filed written submissions on 19 May 2017

seeking costs on an indemnity basis. Mr Raptis has not filed any submissions. But on 26 May 2016 he sent to my Associate (rather than the Court's Registry) a notice of SC:EB

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COSTS DETERMINATION Raptis v City of Melbourne and another

appeal, which includes an appeal against my orders concerning the filing of written submissions on costs. Then, on 30 May 2017 he sent to my Associate an amended notice of appeal. I take it Mr Raptis will not concern himself with a costs submission because he is appealing anyway. Therefore, the lessor's application for indemnity costs is unopposed. 4

The lessor's application for indemnity costs is put on three bases(a)

it made an open offer and a Calderbank type offer to Mr Raptis beforehand to withdraw on exchange for each party bearing their own costs, and as he has now fared having now fared worse in the result, it was unreasonable of him not to accept the offers;

(b)

Mr Raptis commenced and continued the proceeding in circumstances where, properly advised, he ought to have known the Court had no jurisdiction to determine the proceeding, yet he persisted with a dismissive refusal to concede want of jurisdiction; and

(c)

in bringing the proceeding and in his resistance to the application, Mr Raptis has contravened various provisions of the Civil Procedure Act, that is: s 18 (the requirement of a proper basis in making a response in a civil proceeding); s 24 (obligation to ensure costs are reasonable and proportionate), and s 25 (obligation to minimise delay).

5

The reliance on contraventions of the Civil Procedure Act is the basis for relying if necessary on the Court's power under s 29(1)(a) to make any order it considers appropriate 'in the interests of justice', including an order that he 'pay some or all of the legal costs or other costs or expenses' of the lessor and that those costs 'be payable immediately and be enforceable immediately'.

That section preserves

without limitation any other power of the Court to make any order as to costs. 6

What I am about to say about indemnity costs may be unnecessary as being well known to lawyers, but I think it prudent in this troublesome case to state how I interpret the scope of attainable costs on the lessor's application for indemnity costs. I am viewing the lessor's application for costs to be on the indemnity basis under the

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rules of court. Rule 63.28 states Subject to this Part, costs in a proceeding which are to be taxed shall be taxed on(a) the standard basis; (b) the indemnity basis; or (c) such other basis as the Court may direct. 7

Rule 63.30 states that 'On a taxation on the standard basis, all costs reasonably incurred and of reasonable amount shall be allowed'. Rule 63.30.1 states-

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(1)

Subject to paragraph (2), on a taxation on the indemnity basis all costs shall be allowed except in so far as they are of an unreasonable amount or have been unreasonably incurred.

(2)

Any doubt which the Costs Court may have as to whether the costs were unreasonably incurred or were unreasonable in amount shall be resolved in favour of the party to whom the costs are payable.

As I explained in another easel by reference to Williams, Civil Procedure Victoria a taxation on the indemnity basis does not mean paying the winning party's legal bill as rendered by its lawyers under their costs agreement. Before the changes to the costs rules, the usual order for costs was on a party and party basis. That was said to be the strictest form of taxation, confined to costs necessarily and properly incurred to conduct the litigation, but no more. The previous 'solicitor and client' basis of taxation was said to afford a more generous recovery of costs than party/party in that all costs reasonably incurred and of reasonable amount were allowed. That means allowance of costs that were strictly not necessary and proper. But it falls short of an indemnity. Then there were costs orders on an indemnity basis. Such orders were made exceptionally in cases where the losing party had engaged in delinquent conduct such as bringing an unmeritorious proceeding for an ulterior motive, or in wilful disregard of established facts and law. It was a means for the Court to show its disapproval of such abusing conduct. Such an order was not easy to get. If given, it meant that all costs actually incurred would be allowed unless they had been unreasonably incurred or were of a unreasonable amount. But, even then, an award of indemnity costs did not mean the losing party paid the winning party's costs as charged by their lawyers according to their costs agreement, as if to

See BB Australia v Cons/anti [2017] VSC 114 at [BO] .

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say to the losing party 'Here are the bills my lawyers have sent me - now, pay it'. That would require an even more special Court order. Rather, a taxation of costs on an indemnity basis still meant taxation on the scale of costs in Appendix A for costs incurred which had not been unreasonably incurred or were not of an unreasonable amount. 9

Under changes to the Rules, the 'standard' basis of taxation is regarded as a reflection of what was previously known as costs on a solicitor client basis, thus a more generous allowance than the' old' party and party basis. The indemnity basis of taxation under the new rules does not provide a complete indemnification but allows legal costs on scale so long as the items claimed have not been unreasonably incurred or are not of an unreasonable amount. If the lessor's intention is to seek costs to be taxed on the basis of the costs agreement in place between a party and their lawyers, that needs to be especially justified as a special basis under rule 63.28(c) matter of discretion, and stated in the order for costs under rule 63.28(c) which speaks of ' ... such other basis as the court may direct'. To the same effect I think is section 29 of the Civil Procedure Act which uses language that might be taken to allow for the possibility for a special order to pay the bill as rendered to the winning side under the costs agreement as made between solicitor and client.

10

I shall proceed on the basis that the lessor's application here is for costs on the indemnity basis as understood under the Rules. I would say, just in case, if the lessor's application is for a complete indemnification for the payment of its lawyer's bills as rendered, I would decline it.

In my judgment, and for the reasons that

follow, what occurred in this case certainly justifies an order that Mr Raptis pay costs on the indemnity basis under the rules. But something more would be needed to truly justify the near punitive element of a complete indemnification. 11

As is apparent from my judgment, Mr Raptis, a litigant in person, saw fit to conduct his case on a lay assertion that the lease was 'illegal'. He burdened the defendants and the Court with a vast body of irrelevant, discursive and unintelligible material. He would not grapple with the issues or engage with the Court on them. He allowed

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COSTS DETERMINATION Raptis v City of Melbourne and another

himself to be diverted and obsessed with irrelevancies. This added to the burdens of the litigation for the defendants as they had to conduct the case partially by postulating or wondering what Mr Raptis might be trying to say. And it was the same for the Court. In Downes v Maxwell Richard Rhys and Co Pty Ltcf2 the Victorian Court of Appeal made reference to the recognition by the High Court in Neil v Nott3. that a frequent consequence of self-representation is that the Court must assume the burden of endeavouring to ascertain the rights of parties which are obfuscated by their own advocacy. The Court ends up, as happened here, practically having to act in an inquisitorial way to see if there was a credible point somewhere. And there was not. 12

Prior to making the application, the lessor made two offers to Mr Raptis. One offer was in open correspondence; the other was made 'without prejudice'. The open letter, dated 4 October 2016, stated in essence, and with reasoning, that the claims made in his motion lacked any merit or were demonstrably wrong and warned him about cost consequences. The letter invited him to withdraw the proceeding in exchange for which the lessor would bear its own costs. It also informed him that as the Supreme Court lacked jurisdiction for a retail premise lease, then the proceeding was bound to fail. It warned him that costs would be sought on an indemnity basis

if the matter proceeded. 13

On 11 October 2016, the lessor sent him a Calderbankctype letter which elaborated on the basis for the lessor's contention that this was a retail tenancy dispute under the Retail Leases Act and that such a dispute was within the exclusive jurisdiction of the

VCAT. That letter offered, again, that he withdraw his proceedings in exchange for which the lessor would agree to bear their own costs. The letter urged him to obtain legal advice. It is apparent he did not. 14

Such correspondence in the events that have occurred here is a recognised basis for granting a special costs order, that is, where it appears that an action was

> J

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(2014) 46 VR 283, 289. 68 ALJR 509.

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commenced in circumstances where an applicant, properly advised, should have known it had no chance of success, or at least where the letter puts a party on notice as to the significant deficiencies in their case. In those situations the law presumes that proceedings have been commenced or continued for some ulterior motive or a wilful disregard of the known facts or clearly established laws. 15

At the hearing of the application, Mr Raptis conceded, as he had to, that the premises here were retail premises. He was given many opportunities and indulgences to engage with the Court on the question whether this was a retail leases dispute, but he simply failed or was unwilling to do so. · I need not rehearse the contents of my judgment in that regard. It was manifestly a retail leases dispute, and whilst the Court has visited several of the authorities on the question of the expression 'under or in relation to', this was to demonstrate the legal validity of that which was rather apparent.

16

I do not think this issue calls for a laboured analysis of tl'le various obligations under the Civil Procedure Act. Allowances have to be made for a litigant in person. Telling a person with an intense sense of grievance that his case is hopeless is likely to be met with disdain or a greater determination. In this case, I think his case was bound to fail on the question of jurisdiction. It would have been of no disadvantage to Mr Raptis to concede and make his claim about the air ventilation system and the 'illegality' against the lessor in VCAT with the advantage of reduced costs and formality, especially as his case against the City, as I found, was couched in strange and legally incompetent terms that looked to future proceedings against the City.

17

I would prefer to rest my decision in granting costs on the indemnity basis on the recognised ground that Mr Raptis brought a hopeless case, would not heed the reasonable warnings given by the lessor and the City about its hopelessness, conducted the application in a way to not make his case any less hopeless and, I am bound to say, has imposed labours and expense on the lessor and I think it would be unfair to the lessor not to be able to recover its costs on the indemnity basis.

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18

Accordingly, I will proceed to make and authenticate orders in the terms as stated in my judgment together with costs orders according to this determination.

DATED: 30 May 2016

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COSTS DETERMINATION Raptis v City of Melbourne and another